Understanding the mathematics of personal finance: an introduction to financial literacy

This book explains how the calculations of various financial instruments workand also reviews various analysis tools (primarily the computer spreadsheet) to prepare readers to tackle new situations for effective and accurate decision making. This author details how even the most involved loan scenarios can beunderstood just by repeated application of the fundamental concept of compound interest, which is discussed early on in the book. Additional topical coverage includes loan amortization and amortization tables; mortgages (cost of points and up-front fees); prepayment penalties; credit card interest calculations; loan comparisons; life insurance; fixed and variable annuities; and the basics of investing. Essentially, everything involved with loans can be calculatedusing both a simple financial calculator and a computer spreadsheet program. While this book does not provide investment or borrowing strategies or tips for retirement planning, it does provide the tools needed to be able to calculate the real costs and/or profits involved in using these various financial instruments and allows readers to see for themselves what the best deals are. Performing the necessary calculations needed to understand a complex many year, many payment, loan structure can be very difficult if it has to be done by hand.Fortunately, living in the era of inexpensive integrated circuit electronics changes everything. Pocket calculators are inexpensive and amazingly capable, and the author has chosen the Texas Instruments BA II Plus to describe how to perform the calculations discussed throughout the book. Other calculators are similar enough that it should not prove difficult for readers to translate thestep-by-step instructions for use on other models. Similarly, there are many computer spreadsheet programs available, and the author utilizes the MicrosoftWorks spreadsheet; however, its operation is generic enough that the spreadsheets developed in the book can be set up almost identically using other spreadsheet programs.

• ISBN: 978-0-470-49780-7
• Editorial: John Wiley & Sons
• Encuadernacion: Rústica
• Páginas: 242
• Fecha Publicación: 14/10/2009
• Nº Volúmenes: 1
• Idioma: Inglés